Buyers willing to fork out premiums for integrated development projects
Compared to leasehold projects within the same precinct, buyers are willing to pay 7% to 19% extra for integrated projects
While some of the most expensive condos in Singapore draw strong interest from the rich and affluent class of property buyers from overseas, integrated developments which provide extra value in terms of convenience and accessibility have seemed to be the most popular option among the locals and those in the upper middle-class.
Reports have shown that property buyers for new integrated developments in Singapore are usually prepared to fork out an extra premium between 7 to 19%, compared to other new launch 99-year leasehold projects within the same precinct
A typical integrated development in Singapore of such will comprise of private residential units and retail malls with a minimum of 100,000 square feet – some even with connected directly to an MRT station or a bus interchange.
One of them is Park Place Residences located in Paya Lebar. It is one of the latest integrated developments be introduced to the property market and the first one within the city fringe in 10 years. Based on the transactions recorded, units are being sold at an average psf price of $1,806 – an 18% premium over other leasehold developments in the same district.
Park Place Residences is connected directly to Paya Lebar MRT station, a retail mall component called Paya Lebar Quarter and a total of three commercial towers which consists of Grade A offices.
Luxury integrated development projects have also done exceptionally well with residential homes at Wallich Residence by GuocoLand making the headlines, fetching a 13% premium more than the leasehold properties in the CBD since it was launched for sale during end 2013.
Other integrated projects within the central region of Singapore, such as Duo Residences and Marina One Residences have been receiving strong interest as well since they were launched back in 2013 and 2014.
Analysts believe that the unparalleled convenience and the current scarcity (less than 3% of all non-landed private homes in Singapore) of such projects are the main factors for the strong demand.
In addition, rents in integrated development projects often command a premium as well based on data acquired in 2Q 2018. For example, the average rent recorded at Orchard Residences in 2Q 2018 was $6.73 psf per month compared to the overall average rent of $4.42 psf per month for all other non-landed projects in District 9.
Market watchers have also mentioned that the upcoming supply of integrated development projects in Singapore may not be able to meet buyers’ demand in the coming year, given that only 3 of such projects are in the pipeline.
Woodleigh Residences by Singapore Press Holdings (SPH) and Kajima Development will be one of them and this 667-unit mixed development is set to launch before the end of the year. The new launch at Woodleigh will comprise of a 28,000 square metre retail mail, the Woodleigh Village hawker centre, direct access to Woodleigh MRT Station and also Singapore’s very first underground air-conditioned bus interchange.
On top of that, Woodleigh Residences will also be the only integrated development of such scale in District 13 and is likely to fetch a premium of some of the Singapore condo projects within the same vicinity such as Park Colonial by CEL Development and The Tre Ver by UOL group.
Other upcoming sites earmarked for mega integrated developments include the Sengkang Central site (acquired by CapitaLand and City Developments Ltd) and the 3.8-hectare mixed-use site at Pasir Ris Central (currently open for tender).
In total, these 3 sites will yield around 2,000 private homes which would be sold over the next few years.